Text | Entertainment Capital Theory is not empty
A letter of complaint revealed the true appearance of the hot water and corpses of the snack industry.
On December 6th, according to the report of Red Star Capital Bureau, the "No.1 high-end snack" boutique shop formally filed a lawsuit against Yichun Zhao Yiming Food Technology Co., Ltd. (hereinafter referred to as "Zhao Yiming Snacks") in the people’s court on November 27th on the grounds of "concealing important matters of the company and damaging the right to know of minority shareholders". At present, the court has accepted the case.
At this point, the first shot of high-end brand snack merchants and discount snack shops officially started.
According to earlier news, the competition between the two forces has long been revealed. By "concealing the company’s major events", Liangpin Store refers to the merger that happened at the discount snack track. In November this year, the two leading players of discount snacks were very busy and Zhao Yiming Snack Store announced the merger, which will jointly build the largest discount snack brand in China, and the industry power should not be underestimated.
However, Liangpin Store, as one of the shareholders of Zhao Yiming Snacks, was hastily "parted" by Zhao Yiming Snacks, but was informed of its merger with its competitors. A good shop that suffered from "backstab" went to war with a paper book.
The discount snack shop with "low price" as the spear has become the strongest force in the snack track and entered a period of rapid expansion. Snacks are very busy. In the first half of this year, 1,000 stores were added. Another snack brand, Youming, also announced that the number of stores will exceed 16,000 in 2026.
After the cost performance has become the key driving force of consumption, the outward expansion of discount snacks is also frequently putting pressure on high-end snacks, which have to fight back through structural price reduction. On November 30th, Liangpin Store implemented the largest price reduction in 17 years. The average price of its 300 products was reduced by 22%, with the highest drop of 45%. Online celebrity Snacks Three Squirrels has been playing the strategy of "high-end cost performance" since last year.
At one end, it is a snack shop that is expanding at a low price, and at the other end, it is a high-end snack brand that strives for survival at a low price. The snack track with accelerating low-price competition is facing a brand-new battle of survival torture.
01 Online channel dividend peaked, and high-end strategy failed.
The well-known snack brands in online celebrity, such as the "Big Three Snacks" represented by "Good Shop", "Three Squirrels" and "Herb Flavor", either started during the bonus period of e-commerce or took advantage of the outlet of entertainment marketing to describe a similar development vein.
Three squirrels, born in the period of rapid development of e-commerce, have sprung up with low-cost online e-commerce channels and quickly occupied the category of nut snacks. Subsequently, the three squirrels used entertainment marketing as a lever, including signing TFBOYS endorsement, launching and implanting in the annual explosion of "Ode to Joy" and other film and television comprehensive, further amplifying the brand influence.
Since 2010, the investment in online marketing has also increased year by year. On the one hand, Baicaowei’s efforts in spokesperson marketing and popular film and television comprehensive delivery are not far behind. From official announcement of Jackson Yee to cross-border variety shows, it takes advantage of the entertainment topic to enhance brand awareness; On the other hand, Baicaowei has also begun to build a communication position on social platforms, and has been deeply cultivating its content on younger social platforms such as bilibili and Xiaohongshu.
While effectively opening up the brand volume, marketing investment has also brought some pressure on product pricing. Coupled with the pursuit of fine packaging and design, under the superposition of various factors, snack brands that once opened the online market at a low price began to anchor the "high-end upgrade" route, and prices also rose with the trend.
Until 2021, with the peak of online traffic, several snack brands on the deep cultivation line were in trouble one after another.
On the one hand, the cost of online traffic has soared, and the conversion effect is no longer radical. Snack brands nourished by online channels are naturally the first to bear the brunt. According to the financial report data, the performance of the three squirrels has declined year after year. In the third quarter of this year, the revenue of the good shop decreased by 4.53% and the net profit decreased by 98%.
A snack brand revealed to the chopped pepper that, in fact, double 11’s big promotion is often "making money at a loss" for the brand, and there is not much room for profit. The real appeal of the brand’s painstaking efforts is actually the list recommendation mechanism in Taobao Station, with the help of list traffic to store water for the subsequent New Year Festival. Leisure snacks are cyclical products, and the profits of the three giants who position high-end snacks often come from the demand stimulation of big nodes.
On the other hand, the vertical snack brand, which emerged from the live e-commerce, successfully divided the market share with the logic of big single product and launched an attack on the good shops. Wang Xiaolu, with a tiger skin wind claw, sold out all the goods for the New Year Festival when she first boarded the live broadcast room in Li Jiaqi. Since then, she has become a frequent visitor to the live broadcast room. Wei Long, relying on a 50-cent spicy bar, frequently went out of the circle and occupied the snack list of consumers’ daily life scenes.
Contrary to the logic of big single products, it is the whole category snack brand represented by good shops. This kind of brand is rich in SKUs, trying to meet the diverse purchasing needs of consumers and better matching the strong demand for holiday gifts, but it is difficult to enter the normal consumption scene.
At the same time, the operation mode of the snack giant OEM has also laid a lot of hidden dangers for it. The snack brand with OEM as its main logic failed to build a perfect supply chain system, which not only lost the control of product quality, but also further lost its core competitiveness.
02 The offline channel is flourishing, and the horse race is threatening.
Different from the micro-situation of online channels, offline channels began to release vitality.
During the three years of the epidemic, the closing tide of large supermarkets and shops won a better opening point for snack supermarkets, further releasing the offline consumption power. According to Euromonitor statistics, the market size of the snack food industry reached 482.3 billion in 2022, and the e-commerce channel has developed rapidly since 2012. However, the offline market is still the main channel for the circulation of snack foods, with supermarkets accounting for 39.7%, becoming the most important purchase channel for snack foods.
As a fast-moving consumer goods, offline scenes face consumers directly, which is the natural center and contact point of snack circulation. Compared with the long-term online consumption pattern, the snack mass-selling stores that radiate in the radius of consumers’ activities and go deep into the community and supermarkets have a unique advantage of reaching. In other words, in the leisure snack track, consumers are more dependent on channels than brands.
More importantly, the survival mode of the foundry not only failed to help the three giants of snacks build a moat of products, but also made them fall into the quagmire of quality frequently. Discount snack shops and snack discount stores, which also focus on white-brand products, take advantage of price to achieve overtaking in corners through offline channels.
On the basis of the business model of temporary discount stores, snack hypermarkets further tap the potential of supply chain.
The most critical action is to master the initiative of supply chain. Different from the deep binding between discount stores and brands, snack hypermarkets decided to streamline the supply chain, remove the shackles of brands, sell white-brand snacks directly, and use low-price strategy to promote scale expansion, and then put pressure on upstream brands.
Compared with the high-end snack brands that hold high and play high, the large-scale snack mass-market stores with white snacks choose to break through the sinking market, forming obvious regional characteristics. Snacks started in Changsha, Hunan Province, and through intensive regional expansion, the number of stores exceeded 2,000 in five years. Zhao Yiming Snack Shop, which emerged in Jiangxi, has been deeply cultivated in Jiangxi, Anhui, Guangdong and other regions, and the momentum should not be underestimated; The Sugar Nest, which rose in Ran Ran, Xiamen, is located in coastal markets such as Guangdong and Fujian, and has more than 1,000 stores.
The sinking of snack discount stores has reached counties, townships and other areas, which is close to the blank market of big-name snacks. Snacks are Busy Brand Director Cao Meng revealed in an interview that snacks are busy and have more than 300 township stores.
The consumption increment of the sinking market and the scale effect of snack supermarkets help them win the advantage of supply chain, and further have the premium ability with brands, and brands begin to move closer to snack supermarkets.
Gan Yuan Food, a snack food company, has established cooperation with snack distributors such as Busy Snacks, Zhao Yiming, Youming Snacks, and Wife Adults. Yanjinpu’s financial report shows that snacks were very busy in 2022, and the system opened Wal-Mart with sales of 211 million yuan, becoming Yanjinpu’s largest customer; This year, Wei Long set up a business department to connect the discount channels for snacks, and plans to launch "customized channel packaging" and an independent price system.
In addition to traditional snack selling, prefabricated and instant food has also begun to tilt to the discount snack channel. The boundaries of snack chain brands are constantly expanding, and even the market share of traditional small shops and convenience stores is constantly being tested.
The "staking the ground" under the online snack discount store is particularly fierce.
"A small county town can open seven or eight snack shops in two months." Guo Can, a busy snack franchisee, joined a joint venture with his friends in May this year, and was busy with snacks, starting his first business. "I did my homework before joining, and I said that I would earn more than a thousand dollars a day, and I would be able to return to my book in one and a half to two years." What Guo Can didn’t expect was that just half a month after her opening, two similar shops appeared on the same street. "I directly separated more than half of the customers. According to this trend, I can’t return to this in three years."
Site selection is the key factor to determine whether franchisees can make profits. "Generally speaking, the surrounding areas of schools and communities are advantageous points, and the matching customer base is more accurate." However, there are many loopholes in the implementation of regional protection policies in snack supermarkets that have accelerated into the expansion stage. "Some brands will make it clear that there will be no same brand stores in the adjacent areas, but there are too many similar snack shops to control at all."
In Guo Can’s view, snack shops seem to be a simple business model, but they have invested a lot of money. According to a rough calculation, Guo Can has invested more than 900,000 yuan in just a few months. "The initial fee is 50,000 yuan, the deposit is 30,000 yuan, the decoration fee is 120,000 yuan, the shelf cashier equipment is 140,000 yuan, and the stock preparation is more than 200,000 yuan. These are all part of the initial investment."
In fact, behind the seemingly prosperous business of snack shops, the profitability is not impressive. According to the company’s announcement and official website data, the comprehensive gross profit margin of the stores with busy snacks and preferred snacks is only 18% and 22%, while the gross profit margin of the e-commerce business of good shops can reach 24%.
After the blind expansion of snack collection stores, the whole industry will also usher in price wars, store closures and major reshuffle. After tearing open the market through price, snack shops need to face long-term problems such as brand store operation and supply chain management, which is also an all-round test of enterprise operation and management.
03 Accelerate the integration, strengthen the brand, and the snack industry enters the reshuffle period.
In the path of rapid replication, expansion and rise of snack shops, the old diseases of fast iteration, strong reproducibility and no high product threshold of snack track are exposed.
"online celebrity snacks have a fast iteration speed. Once the products are developed and verified by the market, they will be copied by many parties and then fall into the dilemma of price comparison." An industry person sighed so much about chopped pepper. Low price is indeed one of the tried-and-true strategies to accelerate brand expansion, but from the long-term development of the brand, it is not the sustainable development path of the brand to continuously reduce prices and squeeze profit space.
The dependence of the snack industry on offline channels has been continuously verified. After the price war, the snack industry will usher in a competition and competition on the scale of the offline market.
Players of discount snack brands speed up the integration, make strong alliances through mergers and acquisitions, especially focus on the expansion of sinking market, and strengthen brand awareness while expanding market share. The strategic merger between Snacks Busy and Zhao Yiming Snacks in November is one of the signals. After the strong alliance, the number of its stores and their respective advantageous areas have also been merged. In fact, this is not the first merger of snacks. As early as the first half of this year, snacks were busy and they announced a strategic investment "just goods shop" to jointly develop the national market.
Wanchen Group, a food enterprise, acquired five brands of discount snacks in one breath in October this year, and merged the four brands of Lu Xiaochan, Yadi Yadi, Haoxianglai and Laiyoupin into "Haoxianglai". At the same time, Wife, a chain of discount snacks in Zhejiang, was formally merged into Wanchen Group.
Online snack brands have also begun to tilt toward offline channels. This year, good shops have accelerated the expansion of offline stores, and deliberately resisted the impact of offline channels of discount snack shops with the model of super-thousand-flat stores. Baicaowei has returned offline since 2019. Up to now, Baicaowei has exceeded 100 offline stores nationwide, accelerating the omni-channel integration of online and offline.
Predictably, the format of discount snack shops will not stay in the Warring States period. With the outward expansion of regional brands, the snack chain track will usher in the birth of a strong one.
On the product side, the quality moat is increasingly important for snack brands.
In the snack track where the iteration speed is accelerating, the shortest path for quality breakthrough lies in the outbreak of large items. Because of this, Wang Xiaolu has continuously increased the investment in tiger skin and wind claws, and Wei Long has continuously innovated in the category of spicy strips. While intensively cultivating large items, strengthening quality control is a top priority. After the tiger skin claw was verified, Wang Xiaolu did not hesitate to invest 1 billion yuan to build his own factory. Its purpose was to control the initiative and core competitiveness of the supply chain and maintain the leading edge of the category through strict quality control.
The snack industry, whose market structure is constantly changing, has also ushered in the era of brand power competition, and strengthening brand power has become the industry consensus.
For a long time, as a fast-moving consumer goods, snack brands have strong substitutability and insufficient brand power, which can not stabilize consumers’ cognition and stickiness, resulting in continuous impact and restructuring of the industry. Therefore, snack brands have attacked on the marketing side to build core brand power.
On the one hand, it is still one of the effective means to broaden brand awareness by entertainment marketing. In April this year, the snack was busy, and the official announced Zhang Yixing as the brand spokesperson, taking advantage of the voice of the spokesperson to strengthen brand building. Vertical snack brands such as Wang Xiaolu and Wolong Nuts have also increased the comprehensive content of TV dramas, taking advantage of entertainment topics, strengthening brand building and building brand influence.
On the other hand, user recognition and planting grass have also become an important part of building brand power. Snack brands put more emphasis on getting close to young consumers, and deepened their content around social media platforms such as Jikuai, Xiaohongshu and Weibo. Covering young consumer scenes has become a brand layout trend. The "Xiaolongren", who is often active in the comment areas of major social platforms, has paved the way for Wolong nuts to go out of the circle and become the best "golden father" in consumers’ hearts through social media marketing.
Generally speaking, the future of the snack industry is still full of many uncertain factors: the other side of the discount snack shops is the dilemma of homogenization competition, and online celebrity snacks have been deeply involved in the Internet all the year round but neglected the cornerstone of supply chain construction. The competition between these two forces has not yet been concluded. What is certain is that under the industry competition, snack brands are also speeding up their thinking, making up the shortcomings in brand power and product innovation ability, and looking for a sustainable development path.
